The rapid digital transformation that has occurred since the onset of the pandemic has accelerated massive demand for employees with digital skills. Add to that the Great Resignation phenomenon, and organizations are finding themselves in a seller’s market for digital talent.
Nearly all employers (93%) around the world are struggling to attract their digital talent according to WTW’s 2021 Artificial Intelligence and Digital Talent (AIDT) Compensation Survey. Additionally, 95% of employers are struggling to retain their digital talent, an increase from 88% in 2020. On the positive side, the survey results also revealed three actions employers can take as they begin to rethink — and potentially redesign — their reward offering
The pandemic and resulting shift to remote work highlighted the importance for employers to accelerate their adoption of digital practices — yet many employers weren’t prepared to embark on this trip. As such, 60% of organizations reported that addressing challenges in attracting and retaining digital talent is their top challenge for a successful digital transformation journey. This is a significant jump from 42% in 2020 — and is likely to continue rising. 84% of organizations expect their digital talent headcount to increase or significantly increase in the next 12 months.
To address this digital transformation challenge, organizations need to assess their digital weak spots and the degree to which they need to fortify their digital talent pool. For example, since 2020, competition for talent has gotten tougher in cybersecurity, artificial intelligence and machine learning, e-commerce applications and web publishing, and blockchain. Organizations need to ask themselves how they can differentiate themselves from the competition if they want to win talent in these and other crucial disciplines.
Today’s talent pool is in search of organizations that meet their needs just as much as they meet organizations’ needs. As you begin considering how to attract and retain digital talent, identify whether your primary challenge is attracting talent or retaining it — our research shows that each goal requires a different approach.
For example, while providing interesting, challenging and varied work opportunities is the most important and effective tool both for attracting and retaining digital talent, the similarities end there, according to the survey. In fact, the effectiveness and combination of tools depending on whether you’re trying to attract or retain talent differ across challenges. (See Figure 1.)
For attraction, having a reputation as a great workplace, establishing an innovative and tech-minded company culture, and offering competitive cash compensation are the remaining top four effective tools for organizations. To retain digital talent, it is important to provide a clear path for growth and promotion, provide employees with the opportunity to have a real impact on the organization’s performance, and offer dedicated learning and development programs.
There are two key takeaways from this finding. First, your organizational brand is critical to ensure potential digital-talent hires perceive your organization the right way. Second, communication and transparency are key for an effective retention strategy, especially in providing clarity and transparency to digital talent regarding role and career opportunities.
The changing world of work is prompting organizations to rethink and redesign their rewards in order to keep up with new ways of working. Paying market median today translates to being market-mediocre, and a one-size-fits-all pay philosophy is neither enough nor suitable for catering to the diverse and dynamic talent market. Organizations must be more authentic and creative.
Also, rewards differentiation allows your organization to be flexible in different situations and when talent needs and priorities shift. Differentiation provides the ability to focus your resources to address immediate talent needs, which is why it’s important to understand the talent market landscape as well as the roles and skills that are business-critical in order to align your rewards accordingly.
Interestingly, only 12% of organizations that have a skill-premium program consider it to be very effective, according to the survey. Many organizations reported continuing to struggle with accessing reliable premium information for hot skills. Because digital talent possesses these critical skills and capabilities, having a skills layer on top of your existing rewards strategy can help your organization become more successful in attracting and retaining the talent with the right skills. You can utilize an interactive analytics platform that enables your organization to determine skill premiums and assess market demand for these skills in order to create a differentiated rewards approach for digital talent.
An organization’s values, purpose and beliefs also matter to employees. After all, 61% of employees choose, leave, avoid or consider employers based on their values and beliefs, according to research. Organizations can stand out by applying this purpose-driven approach also to their total rewards. Employees want to work for employers that are fair and transparent about the reward programs they offer, provide competitive total rewards and benefits, and take a stand on pressing social issues.
Employers are learning that in a new world of work, they must revolutionize their rewards to win over the talent they need. And employers that choose a wait-and-see approach will likely find themselves falling further behind, as the shortage of digital talent is being driven by a continuous evolution of digital technology that isn’t slowing anytime soon. Organizations must plan based on reality and leverage quality market data and insights to stay ahead of the competition and remain on-pace in their digital transformation journey.
